Diversification, Entrepreneurship, and Natural Resources: The Case of Qatar

The majority of countries with large quantities of natural resources have not managed to achieve economic stability or development, with the exception of a few. Those countries have depleted their natural resources through mismanagement and corruption. Challenges that arise because of the mismanagement of natural resources include resource depletion, sharp price drops, political conflicts, and economic instability. Such challenges coupled with an increasing population are the reasons behind economic stagnation or even worse circumstances. There have been numerous efforts in resource-rich countries to change the inverse relationship between resource endowment, on the one hand, and poverty and lack of economic growth, on the other. Policies aimed at changing the situation have been developed, including putting the income generated from natural resources to good use, such as improving the living standards of citizens while also improving the infrastructure. This study takes into account the case of Qatar. The discovery of natural gas and oil changed the country’s economic position and the welfare of its citizens. Qatar, through its government, has implemented strategies that have sustained the country over decades based on the management of revenues obtained from natural resources. The small population and the political system in Qatar have played significant roles in its economy. Qatar is considered to be among the richest countries in the world. Currently, it is the leading exporter of liquefied natural gas (LNG) in the world. Qatar uses the ruling agreement, which ensures that its citizens are provided with free education and healthcare, among other benefits, in exchange for political rights, which are not granted. There have been efforts to diversify the economy by improving the capacity of innovation and entrepreneurship. The government of Qatar is investing in educating its citizens in addition to establishing new companies and startups in other sectors besides the oil and gas sector. Such efforts have not yet yielded many results due to the small population size and the structure of the government, which limit the capacity to innovate. Nevertheless, Qatar is currently providing incentives after amending its laws to attract talented individuals who will take the country’s innovation to another level.